“zero hour contracts” and other contracts with varying terms of employment serve the interests of capital in several ways. Firstly they allow a greater degree of “hiring and firing” and the use of recruitment agencies allow the companies concerned to get out of health and safety legislation (what limited protections unions have won) and to be able to hire and fire far more quickly. You could be working for an agency for three years and not get the same “benefits” as a permanent employee because there will almost certainly be “breaks” in your service due to the nature of precarious work.
The second way in which it benefits capital is that it creates (or exacerbates) tensions between different workers working in the same company. These already exist and are encouraged to some extent but when temporary workers are involved paradoxically their low status can be one of the ways in which their loyalty to the company is made more likely, because there is a perception which is deliberately maintained, that for example temporary workers cannot go on strike. In practice legally this is not so but in reality temporary workers will often not be asked back to the company if they go on strike and the agency may not call them for any more work again. In addition permanent staff fear being replaced with temps who will do the work for less on worse terms and conditions whereas the agency staff resent the fact that the permanent staff are on slightly better contracts and can have time off sick for example without thinking they won’t get paid.
The third reason why it benefits employers is because temporary workers will work hard for the company in a short of time in the hope of getting more work and pursuing the holy grail of a permanent job. However their nature of their employment is transient so they often don’t get to form attachments with other temporary workers or other workers in the company as you would in a workplace where everyone had been there for years and defend their interests.
This state of affairs is of course exacerbated with the rise of workfare and “volunteering” “apprenticeships” “internships” and so on. Of course recruitment agencies may struggle now with the role they fulfil being replaced by the DWPand the the effect of companies not being obliged to pay anything which is why I predict that a future “turnaround” will be less on the part of the capitalist class listening to humanitarian arguements about workfare and not to do with upsetting recruitment companies.
Employment legislation as biased towards towards the bosses as it is, is becoming meaningless as there are so many employers bypassing it through these methods and “exemptions” from the national minimum wage including redefining whether people are working, or are merely “working for their benefits” or doing a “work related activity” therefore don’t have to be paid will have the effect of rendering the NMW meaningless and is an attack on the social wage (which includes healthcare, benefits, pensions etc not just wages) across the board